📈 US Stock Market Growth: Over the last 2 years, the US Stock Market has jumped by 60%. This rapid growth is one of the strongest rallies in US history.
💰 Wealth Inequality Crisis: Despite the market gains, a record 30% of Americans are living paycheck to paycheck, with consumer sentiment at one of the lowest levels in 30 years.
📉 Historical Context: Similar gains of 60% in 2 years have only occurred a few times before (1987, 1996, 2011, 2021), often preceding significant market corrections.
🔍 Market Corrections: A 20% decline today would revert the market to late 2021 highs. Corrections require specific conditions, often linked to inflation.
📊 Inflation Trends: In 2021, 2011, and 1987, inflation jumped to at least 4%, leading to market corrections. In contrast, inflation in 1996 declined, allowing the market to rise until 2000.
📉 Current Inflation Data: Recent data suggests inflation is trending lower, with new tenant rent prices contracting for the first time since the financial crisis. This indicates a potential continuation of low inflation.
🏦 Corporate Profits: US corporate profit margins are at the highest levels in history, representing 133% of GDP growth, which fuels further investment in financial assets.
📅 Market Outlook: As long as inflation remains low, financial assets may continue to rise. Recent risks appear to have dissipated, prompting new long trades on US stocks.